Lawmakers approve $36.5B budget on eve of fiscal new year

Nashoba Publishing

Posted:
07/01/2014 09:46:47 AM EDT

By Michael Norton, Gintautas Dumcius and Matt Murphy

STATE HOUSE NEWS SERVICE

STATE HOUSE -- Over the objections from critics who cited growth in state spending, the state payroll and in the cost of health insurance programs, the House and Senate on Monday approved a $36.5 billion fiscal 2015 budget that makes investments in mental health services, substance abuse treatment, local aid to cities and towns, and housing programs.

The bill, proposed Sunday night by a conference committee, cleared the House 144-7 and the Senate 38-1.

Some senators also voiced concerns about the budget's dependence on casino licensing revenues, given the possibility that voters could vote in November to repeal a 2011 casino law allowing up to three resort-style casinos, but Senate Ways and Means Chairman Stephen Brewer said the $73 million in gaming revenues in the budget were not so much that lawmakers could not adjust if the ballot question passes.

Supporters of the budget touted less reliance on one-time revenues in the budget, the preservation of a $1.3 billion rainy day fund, and responsiveness to funding needs in areas like education, local aid, housing and mental health.

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Brian Dempsey, a Haverhill Democrat and the House's budget chief, said the budget will also take major steps toward accelerating payments to reduce the state's unfunded pension liabilities, an action that he said would be well received by Wall Street bond rating agencies.

"As we move forward and begin the new fiscal year, I believe we take a balanced approach, that we recognize that we need to continue to be cautious in terms of the direction we move in," Dempsey said.

The final budget's bottom line is larger than the spending plans approved in either the House or Senate earlier this year, reflecting a 5.5 percent growth in spending that surpasses the original revenue growth estimate used to build the budget. The difference is accounted for, in part, by relying on $35 million from a tax amnesty program, additional one-time tax settlements and Medicaid and Group Insurance Commission revenues from new communities joining the state-administered health insurance program.

"I think you can see cautious optimism," Brewer said about the prospects for future economic growth in Massachusetts, citing the recent decline in unemployment to 5.6 percent. "The recovery is there. It is not roaring. I would not purport to say that, and we do live with a global uncertainty with what is happening in Ukraine, what happens in Iraq. Those things have a volatile effect on the energy markets and our economy, but we will govern accordingly. This is a full-time legislature that can make adjustment midstream."

A House Republican bid for more time to review the budget was rejected on a party-line 28-123 vote. Rep. George Peterson (R- Grafton) said members should spend more time looking over the lengthy spending proposal.

Rep. Denise Andrews (D-Orange) acknowledged the bill was too voluminous to read before voting, but said she trusts the conference committee and the "due diligence" with which the spending bill was assembled over the past several months.

"So when someone asks me have I read the 500 pages that came out this morning, I printed them off, I'm glancing through them," she said. "But I haven't read it and I won't because I believe in the process that we're engaged in. I came in three years ago and have witnessed nothing but excellence and fiscal management from the chairman of Ways and Means and his team."

Local aid to cities and towns has gone up in the budget in each of the past three years, she added.

But Rep. James Lyons, an Andover Republican who voted against the budget, said state spending had risen 25 percent since Gov. Deval Patrick took office in 2007, that the number of state employees making more than $100,000 is up by 25 percent, and asserted the state payroll has expanded by 10,000 since 2007.

"The Patrick administration, with the support of the Legislature, has used this state budget to move our Commonwealth in a left-wing direction, and I think out of touch . . . with some of the priorities of the people of the Commonwealth of Massachusetts," Lyons said.

Rep. Vinny deMacedo of Plymouth, the ranking Republican on the Ways and Means Committee and a budget negotiator, voted for the bill but cautioned that the 5.5 percent spending increase it authorizes, or about $2 billion, is "somewhat concerning."

DeMacedo, who is running for the Senate seat being vacated by Sen. Therese Murray, said Medicaid and the Affordable Care Act are consuming about $1.4 billion of the $2 billion increase in spending.

He called the federal health care law an "incredibly expensive endeavor" that could eventually affect budget items like funding for substance abuse and local aid.

"The reality is, 900 million dollars of that, we are getting from the federal government," deMacedo said. "But that commitment is not going to be here forever and ultimately we are going to deal with the realities of that growth on our own, and that is going to be difficult."

Sen. Robert Hedlund, a Weymouth Republican, was the only vote against the budget in the Senate, though Sen. Richard Ross, who served on the conference committee, said he worried about the reliance on casino licensing fees and declining level of local aid as a percentage of the state budget.

Senate Minority Leader Bruce Tarr, a Gloucester Republican, also said it was important as the economy rebounds that lawmakers not forget to live within their spending means, and urged his colleagues to continue moving toward a budget that does not rely on one-time revenue or reserves during positive economic times. On par, however, Tarr said the budget made forward progress, noting "important investments" in regional school transportation and special education for cities and towns.

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